Commonwealth Bank slashes savings accounts rates in wake of RBA cuts

Commonwealth Bank has followed other big lenders and cut interest rates on its saving accounts.

A Commonwealth Bank ATM in Sydney. Picture: AAP

Commonwealth Bank has followed the other major banks in slashing its savings rates in the wake of the July cut to the official cash rate.

The bank has reduced its savings rates by up to 25 basis points, with its Netbank savings account now offering just 0.15 per cent ongoing, after offering an introductory rate of 2.05 per cent for the first five months.

That ongoing rate is well below inflation, which is currently running at 1.3 per cent per annum.

RateCity research director Sally Tindall described the move as another blow for savers.

“CBA has cut some of its savings accounts by just 0.15 per cent while others have been slashed by up to 0.25 per cent,” she said.

“CBA cut the majority of its variable home loan rates by just 0.19 per cent so it’s disappointing to see some cuts to savings accounts have gone above this.”

Earlier this month, NAB cut its iSaver rate to 0.11 per cent, while ANZ cut the rate on its Online Saver to 0.15 per cent.

Both online savings accounts offered a much higher introductory rate, NAB offering 2.11 per cent for the first four months while ANZ offered an introductory rate of 1.95 per cent for the first three months.

Westpac cut its eSaver interest rate to 0.15 per cent ongoing, following an introductory rate of 2.16 per cent for the first five months.

“Now is an excellent time to review your savings accounts and see if you are getting the most bang for buck in what is a very difficult market for savers,” Ms Tindall said.

According to RateCity, Endeavour Mutual Lifestyle Account offers savers the highest interest rate of 2.75 per cent, but that requires at least $400 in deposits each month and savers must be below 35.

The RAMS Saver account offered 2.55 per cent, as long as savers deposited at least $200 a month and made no withdrawals.

The Reserve Bank cut the official cash rate to a new record low of 1 per cent earlier this month, with a further cut widely expected before the end of the calendar year.

The four major banks have already cut their five-year term deposit rates by between 85 and 35 basis points since January 1, according to RateCity.